During a conversation with my mother today, she explained why she chose to abstain from debt for several years, despite encouragement from the government. She mentioned that one of the main reasons the government encourages debt is to stimulate economic growth, which in turn allows people to purchase goods they wouldn't otherwise be able to afford. However, she also noted that this approach doesn't always make sense in Africa, where many things don't work as intended. Attempting to use borrowed money for good purposes can often lead to negative consequences.
Taking a loan in Africa is not always associated with negative intentions. Although some people may have good intentions, the system might not always work in their favor. Foreign countries with a good economic system tend to have a better experience with loans. However, even in these countries, the older generation tends to avoid debt due to their experience with a less prosperous economy. On the other hand, the new generation is used to a good economy and has a higher income, which makes it easier for them to borrow. While some might argue that Africans should take more loans, it is important to consider the system and individual circumstances before making such a decision.
There are indeed a lot of opportunities in Africa, and if you have the money, it will be easy for you to establish because there are a lot of things you can take advantage of, but this is just an experiment, and when you want to experiment, especially in places like Africa, it is always better to start experimenting with your own money and not the money you borrow. It always makes sense when the experiment is now working and you're already seeing some dividends before you go out there and borrow some extra cash. The bank knows this, and they have been able to profit from it.
Foreign countries have high income rates, which allow them to take more loans despite having high debt rates. However, Africa has a low debt rate due to its low income rates and poor economy. As a result, borrowing money with low-income rates and in a weak economic state can lead to a difficult financial situation, which is why many people in Africa avoid it. This is also coupled with the fact that so many things don't work in Africa, and when you take a loan for a good cause, you might regret it. It will be difficult for you to pay back because of the low-income rates and the bad economy, and that's why people stay away from debt but does it mean that debt is a terrible thing and most African people should stay away from it?
Debt only makes sense for the rich in Africa
Many people online talk about taking a loan from the bank to invest in real estate, but this is not possible in Africa due to the lack of credit cards and other means to borrow money. This makes it difficult for poor people or those struggling to borrow money in Africa. Banks in Africa only lend to people with a lot of assets and money, which is why only rich people can borrow life-changing money in Africa.
Debt can be a useful tool in many parts of the world, but it carries greater risks in Africa due to the challenges of starting and sustaining a business in this region. While borrowing to fund a new venture may not always be advisable in Africa, investing in an established enterprise can be a more prudent choice. Given the low income rates in many African countries, it's important to carefully consider the potential consequences of taking on debt, as it could have significant implications for both you and your family. In contrast, borrowing in a more stable and established system can make it easier to repay your debt, highlighting a key difference between Africa and many foreign countries.
Thanks for your time.
